Journal Articles
Discussion Papers
Google+
Twitter
FacebookJournal Article
Abstract
The paper explores utility measures by combining experiments with mathematical derivations in the psychophysics paradigm. The analysis on the ultimatum game experiment reveals evidences for the utility threshold and thus supports Bernoulli’s utility logarithmic law. Both experimental results and theoretical derivations show that the logarithmic law is suitable for the description of commodity choice and the power law for risk choice. The further mathematical demonstration indicates the logarithmic law for utility scaling to be a Klein–Rubin utility function, a utility function well defined in microeconomics. Based on this, the experimental utility measure is connected with the econometric model Linear Expenditure System, and presents an experimental procedure for testing the utility maximization hypothesis, which will resolve a long unsettled perplexity in a fundamental stone of economics since Gossen proposed it in 1854.
Data Set
Data sets for articles published in "Economics" are available at Dataverse. Please have a look at our repository.
The data set for this article can be found at: http://hdl.handle.net/1902.1/17166
JEL Classification
Citation
Assessment
Downloads:
714 (Journalarticle: 408,
Discussionpaper: 306)
Search this article at Google Scholar
Comments and Questions
See attached file
See attached file
If I had my way the subject of econometrics sould be limited to single variable functions, for which it was originally developed to meet. It is a mistake and a confusion to try to apply it here and I do not agree with the approach taken.
See attached file